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Monthly Archives: April 2014

A lot of people think that investment in hi-tech will get the world out of the economic doldrums. Under the current system of distributing wealth I very much doubt it. Recently I read an April 2014 edition Prospect article by John McDermott titled You’re next. Will technology make professional jobs redundant? (behind a paywall) which reminded me that not only do I doubt it but I expect the opposite. It reminded me to leave myself a note here about the several things I’ve come across recently which point most persuasively and ominously in this direction.

From the aforementioned McDermott:

“Behind the voguish discussion about technology is perhaps a more important trend: the declining share of income going to labour than capital. And without a political response, the type of technological change discussed by [techno-optimists] Brynjolfsson and McAfee would only further such a divergence.”

McDermott speculates that “new machine age continues to regard capital at the expense of labour”. Because of what I’ll euphemistically call a distribution problem, that capital is concentrated in the hands of a few. For this reason he doubts that education can address the inequalities inherent in a hyper-meritocracy – even with the indignity of ‘venture-philanthropy’. I was reminded of the My Teacher is an App episode I wrote about recently – the Waldorf school in silicon valley where the Google and Yahoo employees send their kids to keep those creative little minds far, far away from the operation of a computer.

I often argue with one of my closest work colleagues. I think that, because of the way this society is organised, computers will take away jobs from more humans than they create jobs for. He is skeptical. Here is a concrete example of my being right. April 2nd was Autism Awareness Day. I’ve twice been thrown into the company of a student at work I’m almost certain is on the spectrum, and I’ve become quite interested in what I understand his challenges to be (and many others – autism is one-in-a-hundred), so I listened to an RSA recording titled Autism at Work: Releasing Talent and Harnessing Creativity. From it I discovered that people with autism tend to be punctual, like routine, are content to do the repetitive tasks their colleagues dislike – and, in passing, that they are losing precisely those jobs to computerised labour. Most people with autism would like to be employed but, squeezed out by machines and misunderstandings, most are not.

Certainly Luddites were right about the problem of machines. Why is technology so attractive to employers that they would prefer to render vast tracts of their potential custom without the disposable income to actually buy their product? Humans, as variable capital, are unreliable. When they go wrong, the employer pays twice – once for their sustenance as workers (their food, fuel, shelter i.e. their wage) and once for their replacement while they take their compassionate leave, maternity, sickness, industrial dispute, resignation or whatever. Machines only need maintenance and phased replacement. Philosopher of education David Blacker devotes quite a lot of the early part of his book The Falling Rate of Learning (sorry, it’s Zero Books – I received it as a gift otherwise I would have hesitated because of at least one of Zero’s authors) to this matter. Citing the economist Tyler Cowen (as does John McDermott above – she must be worth reading. Oh. He’s not a she.) Blacker doubts that hi-tech can sustain education beyond a basic level.

“The trouble is that once those initial large productivity gains have been reaped, the return on the human capital investment levels off – perhaps to the point of unfeasibility. Ironically, while technological development made human universal education possible, those same technological developments and subsequent productivity increases render further education for the masses mostly a waste.”

But surely workers are needed to actually make and run the machines? And here it gets very dark, but very plausible, and I will quote at length (pp47-47 of the 2014 Kindle Edition),

“As the machines get better, however, by definition even a smaller percentage of the machine-maintainers are ultimately needed. This level of expensive educational investment simply does not “pay” with regard to most people, because more and more of us are not exactly needed for much of anything. No longer needed as workers, the domestic masses are needed as open mouths into which to force feed as much consumption as possible, an irrational strategy that purchases short-term overconsumption at the price of long-term underconsumption (due to the inevitable ensuing debt overload) and hence is defeating of its very purpose. Domestically at least, neoliberalism really needs consumers and otherwise neutralized types (e.g. the incarcerated) rather than the industrial era of capitalism’s skilled and semi-skilled labor. For the dirty little secret of the high tech economy is that, despite incessant boosterism to the contrary, it does not need widespread technical competence; most jobs in the high tech environment demand stultifying activities that require nothing beyond basic literacy – if that. … For every “high tech, high wage” worker enjoying a cool workplace at google.com, there are many, many more who are “enjoying” the inverse proportion between high tech and their job demands: the higher the tech, the dumber the worker can be and, ultimately, in the best case neoliberal scenario, phased out altogether where possible (via outsourcing and/ or further automation).”

But even though so many of the biggest companies in the world are involved in peddling consumables (Google is primarily an advertising company, for example) nobody thinks a consumer economy is a good idea. In Blacker’s world very few people get paid sufficiently to consume, so his expectation is that they will be allowed to perish. Which reminds me of the recent report from the Intergovernmental Panel on Climate Change which temporarily sobered up the establishment for a week or so.

In the book Blacker distinguishes between old kinds of capitalists – upstanding, patrician, enlightened sorts – and new, socially useless kinds who avoid paying tax and when faced with healthy competition, instead, blob-like, attempt to absorb their competitors. He mentions in passing that Henry Ford, one of the old kind, decided to pay his workers $5 per day to create a blue collar middle class which could afford to buy his cars. For the first time I thought of him fondly. Then a bum note crept in – could this even work in a profitable industry? Apparently not – I read a right-winger insisting that Ford paid over the going rate simply to retain a particularly skilled workforce which was very costly to replace at a time – 1913 – when demand for labour outstripped supply.

Not like now. Even if there is growth, it doesn’t have much of a chance to touch the majority of us.

Bonus links:

On BBC Radio 4’s The Bottom Line, 29th March, Evan Davies interviews a panel of entrepreneurs who service the super-rich. I found them craven, venal, and generally revolting, and I had the impression that they even embarrassed their host.

And spitting in the eye of that, The Austerity Delusion, a May 2013 talk at the RSA by political economist Mark Blyth, who in answer to an audience question points out that, no, the world’s richest can’t buy enough services to flush a stagnant economy – (also available as audio only – but if you don’t really grasp Ivy League economics you may need his slides).